Decision on fuel price by March end: Deora

Petroleum Ministry is in talks with Finance Ministry based on recommendations of Rangarajan committee.

A decision on pricing of petrol and diesel and subsidies on kerosene and cooking gas (LPG) is likely to be taken by the month-end Petroleum Minister Murli Deora on Friday said.

"We are in discussions with Finance Ministy and hope that something will come out of it by the end of this month," he told reporters in New Delhi.

The Petroleum Ministry is in talks with Finance Ministry based on the recommendations of the C Rangarajan committee, Deora said.

He further added the panel's suggestions could not be incorporated in the budget as it had submitted its report just a few days before the presentation of the budget.

The oil sector was expecting rationalisation of duties on petrol, diesel, LPG and kerosene in the budget, as had been suggested by the Prime Minister-appointed C Rangarajan Committee.

The Rangarajan Committee was to help retailing firms which posted a net loss of Rs 2898 crore in first nine months of 2005-06 fiscal.

The budget neither hiked subsidies nor rationalised duties, although it did lower the central sales tax on LPG.

The Rangarajan panel had suggested a steep Rs 75 per cylinder raise in LPG price and a Rs 1.21 per litre increase in petrol and Rs 1.96 per litre hike in diesel prices.

On taxation, it had recommended a revenue neutral rationalisation wherein customs duty on petrol and diesel was to be cut to 7.5 per cent from current 10 per cent.

It had also suggested changing excise duties on petrol and diesel (currently at 8 per cent plus Rs 13 a litre and 8 per cent plus Rs 3.25 per litre respectively) to Rs 5 per litre on diesel and Rs 14.75 a litre on diesel.